Centrica
Centrica plc is a British multinational utility company with its headquarters in Windsor, Berkshire. Its principal activity is the supply of electricity and gas to businesses and consumers in the United Kingdom and North America. It is the largest supplier of gas to domestic customers in the UK, and one of the largest suppliers of electricity, operating under the trading names Scottish Gas in Scotland and British Gas in the rest of the UK. It is also active in the exploration and production of natural gas; electricity generation; and the provision of household services including plumbing. Centrica is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index. It had a market capitalization of approximately £15 billion as of 23 December 2011, the 26th-largest of any company with a primary listing on the London Stock Exchange. History Origin Centrica became a separate, distinct corporation on 17 February 1997, when British Gas plc split (demerged) to form three separate companies: Centrica plc, BG plc and Transco plc. Centrica took over gas sales and gas trading, services and retail businesses, together with the gas production operations in the North and South Morecambe gas fields (Rampside Gas Terminal). BG plc was renamed BG Group plc in December 1999. BG Group plc uses the British Gas name overseas but it is a separate company from Centrica and has no involvement with the British Gas retail brand in the UK. In 1998, Centrica’s supplier monopoly for gas came to an end. Centrica maintained the British Gas retail brand but is only allowed to use this brand name in the UK. The electricity market also opened up to competition and, through the British Gas brand, the company started supplying its first domestic electricity customers. 1998 to 2010 In late 1998, under CEO Sir Roy Gardner and Finance Director Mark Clare, Centrica attempted to diversify – firstly by developing the Goldfish credit card,4 then in 1999 by acquiring the AA for £1.1 billion.5 In 2000 Centrica further diversified with the opportunistic purchase of OneTel in the UK, a residential telecoms operator.6 Soon afterwards Centrica acquired the Dyno franchise group (best known for its Dyno-Rod drains unblocking service).7 Centrica also moved into the North American energy-supply market through the acquisition of the Canada-based company Direct Energy in 2000 for £406 million.8 Direct Energy's operations were subsequently considerably expanded through a number of further acquisitions, including of Enbridge Services for £437 million in January 2002.9 This strategy of diversification changed in mid-2003, possibly under pressure from major city shareholders to deliver better returns and/or possibly anticipating pressure on the core UK energy supply business. The change of strategy started with the sale of the Goldfish business to Lloyds TSB Bank10 (who subsequently sold it to Morgan Stanley Bank International Limited).11 Then in 2004 Centrica sold the AA to two private equity firms; Luxembourgish CVC and British Permira for £1.75 billion.12 Then in 2005 Centrica sold their OneTel business to Carphone Warehouse.13 Since 2005 Centrica has declared a strategy of consolidating within the energy sector, upstream and downstream, including expanding operations overseas. New chairman Roger Carr replaced retiring chairman Sir Michael Perry in 2005, whilst new CEO Sam Laidlaw picked up the reins from retiring CEO Sir Roy Gardner in 2006.14 Sam Laidlaw brought significant experience of 'upstream' operations, securing supplies of energy which can then be sold on through Centrica's consumer business. In January 2006, it was rumoured that the Russian state-owned utility company Gazprom was seeking a takeover of Centrica. This created controversy in the media, while the Department for Trade and Industry stated any deal would be subject to "intense scrutiny". Tony Blair announced in April that he would not block any potential deal.15 In September 2008 the Company acquired the Caythorpe gas-producing field near Bridlington to use for storage purposes.16 It also agreed to buy 20% of British Energy from EDF, financing this with a £2.2 billion, 3 for 8 rights issue.1718 The rights issue offered shares at 160 pence per share and closed on 12 December 2008.19 In August 2009, Centrica took over Venture Production, a North Sea gas producer. 2010 to present In 2010, Centrica entered into joint venture arrangements with Tullow Oil to explore for oil in the South Lokichar basin in Kenya. In August 2014, Tullow, the operator, revealed significant oil discoveries had been made in the Etom 1 exploration well and testing block 10BB, which expanded the already proven South Lokichar Basin "significantly northwards," taking in an additional 247sq km. On 17 November 2010, Centrica acquired the assets of heat pump installation company Cool Planet Technologies Ltd. for £0.5 million in cash. This will give a boost to company’s strategy of developing a broad range of low carbon technologies and advice.21 In February 2011 Centrica signed a £2 billion three-year contract with Qatargas for the purchase of 2.4 million tonnes a year of liquefied natural gas.22 In March 2011 Centrica agreed the sale of the electricity and gas supply business of its Netherlands-based subsidiary Oxxio to Eneco BV for €72 million (£63 million) in cash.23 The sale completed Centrica's exit from the supply of electricity and gas in Continental Europe, following the earlier disposal of its supply businesses in Belgium and Spain. In November 2011, Centrica agreed to buy $1.6 billion stakes of 8 fields on the Norwegian continental shelf from Statoil ASA. In a second deal, Centrica agreed to buy 5 billion cubic meters a year gas from the same company from 2015 to 2025 as equal to 5 percent of UK gas consumption. Centrica's Germany-based trading division Centria Energie GmbH was closed in April 2012. In July 2013, it was announced that Centrica would acquire the energy marketing unit of Hess Corporation for $1.03 billion.26 In March 2014, Centrica acquired the retail arm and other assets belonging to Ireland’s state-owned Bord Gáis for a fee of around €1.1 billion. In July 2015, British Gas owner Centrica created 2,000 jobs while cutting 6,000 others, as company profits doubled.